Are Private Car Parks “Fines” Legitimate?

One of the most common questions asked of our legal practice is about the legitimacy of private car park payment notices and how to challenge them.

A number of car parks are operated by private companies in Victoria, sometimes attached to shopping centres. Generally they allow consumers to park for free for up to a certain time period, for example two hours, if they display a ticket on the car. They then charge the extra time in the car park, at around $3 per hour.

These companies have been issuing payment demands to consumers who fail to display a ticket on their car. The amount of the demand is usually around $88, but the consumer is advised that if they pay within 14 days, they only pay $66. Should the consumer continue to ignore the requests for payment, the companies instruct solicitors and/or debt collectors and further sums are demanded. Eventually court action is threatened for a sum in the region of $300.

To send the debt collection or solicitor letters, private car park operators obtain the personal details of vehicle owners by accessing records held by VicRoads, with the help of the Courts.

It’s certainly a controversial practice.

Since 2012, private car park operators in New South Wales have been banned from accessing the personal details of registered car owners. In October 2013, the Greens and ALP tried to introduce laws in the Victorian parliament that would prevent VicRoads from providing personal information to private car parks operators.

That legislation wasn’t supported by the government, and therefore the amendment wasn’t successful – meaning it was ‘business as usual’ for car park operators who continue to issue payment demands.

But a recent tribunal finding has once again cast doubt on the practices of private car parks. In May 2014, the Victorian Civil & Administrative Tribunal (VCAT) ordered that a private car park operator’s claim of $88 of “liquidated damages” in relation to breach of a car park contract was a penalty – and therefore unenforceable.

In the case of Vico v Care Park Pty Ltd (Civil Claims) [2014] VCAT 565, Member Wilson therefore ordered that the consumer, Mr John Vico, did not have to pay the $88 amount to Care Park. Member Wilson did not accept Care Park’s evidence in relation to how it justified the $88 amount, and found that its claim for loss was “overstated”. The Member also found the $88 amount was “wholly unexplained”, with “no forensic veracity” and “no legal or factual providence”.

VCAT’s conclusion once again throws doubt on whether a car park payment notice is enforceable.

So what does it all mean?

It is highly questionable that consumers issued with similar payment notices by Care Park or other private car parks are liable for the full amount claimed. Among other things, consumers who have been issued with a payment notice could write a letter to the relevant operator, citing this finding and asking them to demonstrate that the amount claimed is justifiable, relates to their costs and is not an unlawful penalty.

Consumers who are threatened with legal action by a car park operator should seek legal advice.